By Mariam Sunny and Bhanvi Satija

(Reuters) -Neutrogena-owner Kenvue's third-quarter sales fell short of expectations on Thursday, marking the fifth consecutive quarter of year-over-year decline in its core skin health and beauty products segment.

Kenvue said it is trying to improve sales by spending more on marketing and supplying additional units of its skincare products to stores.

The division's sales fell 4.2% to $1.07 billion, short of the analyst consensus estimate of $1.10 billion, according to data compiled by LSEG, which Kenvue said was due to muted demand for sunscreens and related products in the reported quarter.

The closely watched unit's lackluster sales have earned the ire of activist investor Starboard Value, which has taken a stake of unknown size in the company, pressing it to focus on improving performance at its skin and beauty division.

Kenvue's Neutrogena, Clean & Clear, Aveeno and other skin brands have underperformed this year, while self-care brands that include household names such as Tylenol and Benadryl have grown.

The company said it plans to invest 20% more this year than 2023 towards advertising and engaging more Gen Z consumers through social media marketing.

"This is the right strategy to reinvigorate growth," Jefferies analyst Keith Devas said, adding that transformations of this scale take time.

Kenvue said it now expects annual net sales to grow closer to the lower end of its forecast of 1% to 3% growth. It reaffirmed its annual per share profit forecast of between $1.10 and $1.20. Analysts were expecting a profit of $1.14 per share.

Kenvue's efforts at direct-to-consumer marketing, advertising campaigns and pivot to social media are aimed at connecting more effectively with a younger audience and Gen Z consumers, CEO Thibaut Mongon said on a conference call.

Shares have risen 4.5% so far this year and were trading up 3% during market hours.

Maintaining the 2024 forecast confirms that Kenvue is not planning to increase spending for the year, Devas said.

Sales in the skin health and beauty segment fell 4.2% to $1.07 billion for the third quarter ended Sept. 29, missing analysts' estimate of $1.10 billion, according to data compiled by LSEG.

CEO Mongon said the pace of recovery for skincare products was "hindered" this quarter and the company was not yet seeing the results of the changes it had implemented.

Total revenue fell marginally, to $3.90 billion, below analysts' estimate of $3.93 billion, as strong sales of its self-care products helped offset weakness in other segments.